SilverCrest Announces 2011 Financial Results Cash Flow
from Operations of $14.7 million ($0.19 per share)
VANCOUVER,
B.C. April 10, 2012 � SilverCrest Mines Inc. (the �Company�)
is pleased to announce its financial results for the year and fourth
quarter ended December 31, 2011 (all figures in U.S. dollars
unless otherwise specified.)
�
|
Cash
flow from operations (1)
|
$14.7
million ($0.19 per share)
|
�
|
Cash
operating cost per silver equivalent ounce sold(2)
|
$7.79
|
�
|
Revenues
reported - IFRS (3)
|
$41.9
million
|
�
|
Mine
operating earnings
|
$29.0
million
|
�
|
Comprehensive
earnings
|
$8.4
million ($0.11 per share)
|
�
|
Cash
and cash equivalents
|
$25.9
million (at December 31, 2011)
|
�
|
Working
capital
|
$24.1
million (at December 31, 2011)
|
�
|
Retirement
of the Project Loan
|
$12.5
million
|
�
|
Bought
deal financing proceeds
|
$30.9
million
|
J.
Scott Drever, President, stated; "We are extremely pleased with the
financial performance achieved in 2011. Having achieved cash flow of $0.19
and earnings of $0.11 per share from only 9 months of commercial production
at Santa Elena is due to the extraordinary performance of both our operations
team in Mexico and our management group in Vancouver. We have made
significant progress on all fronts and achieved or bettered our targets in
all major measures of performance. Our strong cash position and cash flow
assures we can continue with our Expansion Plan to double production at
Santa Elena and aggressively explore the La Joya property where the Company
has a major new silver- gold - copper discovery."
Financial
and Operating Highlights:
|
Q4 2011
|
|
Q4 2010
|
|
FY 2011
|
|
FY 2010
|
|
Cash
flow from operations (1)
|
$
|
6,822,618
|
|
$
|
203,072
|
|
$
|
14,652,374
|
|
$
|
(1,625,482
|
)
|
Cash
flow from operations (1) per share
|
$
|
0.08
|
|
$
|
0.00
|
|
$
|
0.19
|
|
$
|
(0.03
|
)
|
Cash
operating cost per silver equivalent ounce sold (2)
|
$
|
5.65
|
|
|
-
|
|
$
|
7.79
|
|
|
-
|
|
Revenues
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver
revenue
|
$
|
3,812,535
|
|
|
-
|
|
$
|
12,086,871
|
|
|
-
|
|
|
Gold
revenue - cash basis
|
$
|
8,189,781
|
|
|
-
|
|
$
|
19,752,954
|
|
|
-
|
|
|
$
|
12,002,316
|
|
|
-
|
|
$
|
31,839,825
|
|
|
-
|
|
|
Gold
revenue - non cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
adjustment to market spot price
|
$
|
5,527,824
|
|
|
-
|
|
$
|
13,081,984
|
|
|
-
|
|
|
|
-
amortization of deferred revenue
|
$
|
728,209
|
|
|
-
|
|
$
|
1,804,352
|
|
|
-
|
|
|
$
|
18,258,349
|
|
|
-
|
|
$
|
46,726,161
|
|
|
-
|
|
|
Capitalized
to Santa Elena Mine
|
|
-
|
|
|
-
|
|
$
|
(4,856,037
|
)
|
|
-
|
|
Revenues
reported
|
$
|
18,258,349
|
|
|
-
|
|
$
|
41,870,124
|
|
|
-
|
|
Cost
of sales
|
$
|
(3,764,200
|
)
|
|
-
|
|
$
|
(9,526,888
|
)
|
|
-
|
|
Depletion,
depreciation and accretion
|
$
|
(1,528,869
|
)
|
|
-
|
|
$
|
(3,386,674
|
)
|
|
-
|
|
Mine
operating earnings
|
$
|
12,965,279
|
|
|
-
|
|
$
|
28,956,562
|
|
|
-
|
|
Gain
(loss) on derivative instruments
|
$
|
908,683
|
|
$
|
(6,164,801
|
)
|
$
|
(11,497,957
|
)
|
$
|
($18,694,631
|
)
|
Other
net income (expenses)
|
$
|
(2,661,503
|
)
|
$
|
393,242
|
|
$
|
(6,653,186
|
)
|
$
|
(274,728
|
)
|
Taxes
|
$
|
(1,349,000
|
)
|
|
-
|
|
$
|
(1,349,000
|
)
|
|
-
|
|
Exchange
gain (loss) on translation to US Dollars
|
$
|
520,196
|
|
$
|
(171,819
|
)
|
$
|
(1,022,390
|
)
|
$
|
(1,037,178
|
)
|
Comprehensive
earnings (loss)
|
$
|
10,383,655
|
|
$
|
(5,943,378
|
)
|
$
|
8,434,029
|
|
$
|
(20,006,537
|
)
|
Weighted
average number of common shares outstanding
|
|
86,663,595
|
|
|
61,659,334
|
|
|
78,909,624
|
|
|
60,304,687
|
|
Comprehensive
earnings (loss) per share - basic
|
$
|
0.12
|
|
$
|
(0.10
|
)
|
$
|
0.11
|
|
$
|
(0.33
|
)
|
Silver
ounces sold
|
|
120,199
|
|
|
27,356
|
|
|
344,725
|
|
|
27,356
|
|
Gold
ounces sold
|
|
9,702
|
|
|
933
|
|
|
23,962
|
|
|
933
|
|
Silver
equivalent ounces sold (2)
|
|
666,303
|
|
|
70,168
|
|
|
1,570,107
|
|
|
70,168
|
|
Ag
: Au Ratio (2)
|
|
56.3:1
|
|
|
45.9:1
|
|
|
50.4:1
|
|
|
45.9:1
|
|
(1)
|
Cash
flow from operations before changes in working capital items.
|
(2)
|
This
is a Non-IFRS performance measure. Silver equivalence is a weighted
volume average based on market spot prices per ounce of gold and silver
at the quarter end dates.
|
(3)
|
IFRS
18 - Revenue, states revenue should be recorded at its fair value, which
for gold and silver is the market spot price on the date revenue is
recognized.
|
The
information in this news release should be read in conjunction with the
Company's audited consolidated financial statements for the year-ended
December 31, 2011 and associated MD&A which are available from the
Company's website at www.silvercrestmines.com
and under the Company's profile on SEDAR at www.sedar.com.
Three
months ended December 31, 2011
During
the quarter ended December 31, 2011 reported revenue amounted to $18,258,349 (2010 - $Nil) which included $12,002,316 in
silver and gold revenues on a cash basis and non-cash revenues of
$5,527,824 for adjustments to gold spot market prices related to hedge
facility deliveries and $728,209 for amortization of deferred revenues
related to payments under the Sandstorm Agreement. The non cash amount of
$5,527,824 represents the difference between the
market spot price at the date of delivery for gold (quarterly average of
$1,677.40 per ounce) and the hedge price of $926.50 per ounce settled as
required by IFRS accounting policies.
Silver
sales were 120,199 ounces (2010 - 27,356) at an average realized price of
$31.72. Gold sales were 9,702 ounces (2010 - 933).
Gold
delivered into the Hedging Facility was 7,362 ounces (2010 - 746) at an
average realized price of $925.51. Gold delivered to Sandstorm was 1,940
ounces (2010 - 187) at an average realized gold price of $725.44 for which
the Company recorded revenues of $1,407,349
consisting of $679,140 in cash received and $728,209 from amortization of
deferred revenue. The Company sold 400 gold ounces (2010 - Nil) at market
spot realized price of $1,743.50 per ounce.
Cost of
sales amounted to $3,764,200. Cash cost per silver
equivalent ounce sold amounted to $5.65 (Non-IFRS Performance Measure).
Other
significant changes;
General
and administrative expenses increased to $1,705,554 (2010 - $667,728)
primarily due to an increase in remuneration and corporate expenditures in
Vancouver and Mexico.
Gain
(loss) on derivative instruments amounted to $908,683 (2010 - ($6,164,801)). Under IFRS the Company's derivative
instruments are fair valued at the financial position date, with the
resulting gain or losses included in the operating results for the period.
The derivative gain relates to the incremental fair value of the MBL Hedging
Facility, which represents the difference between the average market spot
price of gold for the quarter and strike price of $926.50 per ounce.
Exchange
gain (loss) on translation to US Dollars amounted to $520,196 (2010 -
($171,819)) resulting from the change in presentation currency in January
1, 2011, from the Canadian Dollar to the US Dollar and resulting
translation of the Company's Canadian holdings.
Comprehensive
earnings were $10,383,655 or $0.12 per common
share compared to a comprehensive loss of $5,943,378 or ($0.10) per common
share in 2010.
Twelve
months ended December 31, 2011
During
the twelve months ended December 31, 2011, reported revenue amounted to $41,870,124 (2010 - $Nil) which included $31,839,825 in
silver and gold revenues on a cash basis and non-cash revenues of
$13,081,984 for adjustments to gold spot market prices related to hedge
facility deliveries and $1,804,352 for amortization of deferred revenues
related to payments under the Sandstorm Agreement. The non cash amount of
$13,081,984 represents the difference between the
market spot price at the date of delivery for gold (annual average of
$1,623 per ounce) and the hedge price of $926.50 per ounce settled as
required by IFRS accounting policies.
Silver
sales were 344,725 ounces (2010 - 27,356) at an average realized price of
$35.06. Gold sales were 23,962 ounces (2010 - 933).
Gold
delivered into the Hedging Facility was 18,769 ounces (2010 - 746) at an
average realized price of $925.89. Gold delivered to Sandstorm was 4,793
ounces (2010 - 187) at an average realized gold price of $726.40 for which
the Company recorded $3,481,658 related to the
delivery of these 4,793 gold ounces, consisting of $1,677,306 in cash
received and $1,804,352 from amortization of deferred revenue. The Company
sold 400 gold ounces (2010 - Nil) at market spot realized price of
$1,743.50 per ounce.
Prior to
commencement of commercial production, proceeds from the sale of silver and
gold were applied as a reduction to the cost of the Santa Elena Mine. Prior
to April 1, 2011, sales proceeds totaling $4,856,230
were capitalized to the Santa Elena Mine.
Cost of
sales amounted to $9,526,888. Cash cost per silver
equivalent ounce sold amounted to $7.79 (Non-IFRS Performance Measure).
Other
significant changes;
General
and administrative expenses increased to $4,093,438 (2010 - $1,949,220)
primarily due to an increase in remuneration and corporate expenditures in
Vancouver and Mexico.
Loss on
derivative instruments amounted to $11,497,957
(2010 - $18,694,631). Under IFRS the Company's derivative instruments are
fair valued at the financial position date, with the resulting gain or
losses included in the operating results for the period. The derivative
loss relates to the incremental fair value of the MBL Hedging Facility,
which represents the difference between the average market spot price of
gold for the quarter and strike price of $926.50 per ounce.
Exchange
loss on translation to US Dollars amounted to $1,022,390
(2010 - $1,037,178) resulting from the translation of the Company's
Canadian holdings. As at December 31, 2011, the Company held Canadian
holdings of $23.4 million in cash, cash equivalents and short term
investments.
Comprehensive
earnings for the twelve months ended December 31, 2011 was $8,434,029 or $0.11 per common share compared to a
comprehensive loss of $20,006,537 or ($0.33) per common share in 2010.
Commercial
Production at Santa Elena was declared on July 13, 2011, with the second
quarter of 2011 being the first period whereby operating revenues and
expenses were presented in the consolidated financial statements.
Financial
and Operating Highlights:
|
Q4, 2011
|
Q3, 2011
|
Q2, 2011
|
Q1, 2011
|
|
Cash
flow from operations (1)
|
$
|
6,822,618
|
$
|
5,131,481
|
$
|
3,595,218
|
$
|
(52,661
|
)
|
Cash
operating cost per silver equivalent ounce sold (2)
|
$
|
5.65
|
$
|
7.27
|
$
|
8.27
|
$
|
Nil
|
|
Revenues
reported (3)
|
$
|
18,258,349
|
$
|
15,055,514
|
$
|
8,556,261
|
$
|
Nil
|
|
Mine
operating earnings (3)
|
$
|
12,965,279
|
$
|
10,286,196
|
$
|
5,705,087
|
$
|
Nil
|
|
Comprehensive
earnings
|
$
|
10,383,655
|
$
|
81,856
|
$
|
790,429
|
$
|
(2,821,911
|
)
|
Comprehensive
earnings per share - basic
|
$
|
0.12
|
$
|
0.00
|
$
|
0.01
|
$
|
(0.02
|
)
|
Cash,
cash equivalents and short term investments (4)
|
$
|
25,939,774
|
$
|
32,122,284
|
$
|
33,320,876
|
$
|
6,710,196
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes
of ore mined
|
|
326,496
|
|
248,192
|
|
249,217
|
|
155,559
|
|
Tonnes
of waste mined
|
|
1,310,764
|
|
1,058,909
|
|
707,553
|
|
501,819
|
|
Waste/Ore
ratio
|
|
4.01
|
|
4.27
|
|
2.84
|
|
3.23
|
|
Silver
ounces produced
|
|
131,045
|
|
106,636
|
|
74,678
|
|
64,712
|
|
Silver
ounces sold
|
|
120,199
|
|
96,631
|
|
70,326
|
|
57,569
|
|
Gold
ounces produced
|
|
9,536
|
|
8,805
|
|
5,476
|
|
3,152
|
|
Gold
ounces sold
|
|
9,702
|
|
7,627
|
|
4,300
|
|
2,333
|
|
Silver
equivalent ounces produced
|
|
667,805
|
|
575,079
|
|
310,090
|
|
184,483
|
|
Silver
equivalent ounces sold (2)
|
|
666,303
|
|
502,402
|
|
255,182
|
|
146,219
|
|
Ag
: Au Ratio (2)
|
|
56.3:1
|
|
53.2:1
|
|
43.0:1
|
|
38:1
|
|
(1)
|
Cash
flow from operations before changes in working capital items.
|
(2)
|
This
is a Non-IFRS performance measure. Silver equivalence is a weighted
volume average based on market spot prices per ounce of gold and silver
at the quarter end dates.
|
(3)
|
Revenues
reported and mine operating earnings include non cash revenues of $5,527,824
in Q4, $4,681,312 in Q3, and $2,007,810 in Q2, from derivative
instruments and $728,209 in Q4, $572,462 in Q3 and $322,725 in Q2, from
deferred revenue.
|
(4)
|
Cash,
cash equivalents and short term investments decreased in Q4 from loan
repayments of $7.1 million and settling the European gold call option for
$3,020,609 in cash.
|
NON-IFRS
PERFORMANCE MEASURES
The
discussion of financial results in this press release includes reference to
cash operating cost per silver equivalent ounce sold which is a non-IFRS
performance measure. The Company provides this measure to provide
additional information regarding the Company's financial results and
performance. Please refer to the Company's MD&A for the year ended
December 31, 2011, for a reconciliation of this measure to reported IFRS
results.
OUTLOOK
FOR 2012
For 2012,
the Company's immediate focus is to diligently operate its flagship Santa
Elena open pit silver and gold mine, continue to expand the value embedded
in the Santa Elena mine by proceeding with the three year expansion plan to
double metals production, and to rapidly advance the definition of a large
polymetallic deposit at the La Joya property. The specific targets are
expected to be as follows:
Santa
Elena Open Pit Production Targets
�
Estimated
annual production, 33,000 gold ounces and 435,000 silver ounces;
�
Expected
operating costs of $18.5 million;
�
Average
cash operating cost of $8.20 per ounce silver equivalent (55:1 Ag:Au);
�
Sustaining
capital expenditure of $2.5 million;
�
Operating
cash flow in excess of $2 million per month, based on $1,600 per ounce of
gold, $30 per ounce of silver.
Santa
Elena Expansion Targets
�
Collar
underground decline in January, 2012 (achieved);
�
Complete
underground development, including main ramp and exploration drifts, of
approximately 2,350 meters;
�
Secure long
lead time items for mill and initiate tank fabrication;
�
Complete
Pre-Feasibility Study on Cruz de Mayo satellite deposit as part of the
Expansion Plan (commenced);
�
Complete
Pre-Feasibility Study on Expansion Plan (underground and mill - commenced);
�
Drill Santa
Elena at depth to expand underground resources (commenced);
�
Continue
site exploration for further discoveries;
�
Budgeted
capital expenditure for 2012 estimated at $20 million including expansion
plan and exploration.
La
Joya Project Targets
�
Complete
Phase II drilling program of approximately 80 holes: core (60) and reverse
circulation (20) drill holes (commenced);
�
Explore the
Coloradito, Esperanza and Santo Nino targets adjacent to the Main
Mineralized Trend ("MMT" (commenced);
�
Complete
revised resource estimation using Phase II results in Q4 2012;
�
$3 million
budget for exploration through June, with additional $3 million estimated
through December 31, 2012.
N. Eric
Fier, CPG, P.Eng. and Chief Operating Officer for SilverCrest Mines Inc.
and Qualified Person for this news release has reviewed and approved its
contents.
SilverCrest
Mines Inc. (TSX VENTURE:SVL)(OTCQX:STVZF)(PINKSHEETS:STVZF)
is
a Mexican precious metals producer with headquarters based in Vancouver,
BC. SilverCrest's flagship property is the 100%-owned Santa Elena Mine,
which is located 150 km northeast of Hermosillo, near Banamichi in the
State of Sonora, M�xico. The mine is a high-grade, epithermal gold and
silver producer, with an estimated life of mine cash cost of US$8 per ounce
of silver equivalent (55:1 Ag:Au). SilverCrest anticipates that the 2,500
tonnes per day facility should recover approximately 4,805,000
ounces of silver and 179,000 ounces of gold over the 6.5 year life of the
open pit phase of the Santa Elena Mine. A three year expansion plan is
underway to double metals production at the Santa Elena Mine and
exploration programs are rapidly advancing the definition of a large
polymetallic deposit at the La Joya property in Durango, Mexico.
FORWARD-LOOKING
STATEMENTS
This
news release contains "forward-looking statements" within the
meaning of Canadian securities legislation and the United States Securities
Litigation Reform Act of 1995. Such forward-looking statements concern the
Company's anticipated results and developments in the Company's operations
in future periods, planned exploration and development of its properties,
plans related to its business and other matters that may occur in the
future. These statements relate to analyses and other information that are
based on expectations of future performance, including silver and gold
production and planned work programs. Statements concerning reserves and
mineral resource estimates may also constitute forward-looking statements
to the extent that they involve estimates of the mineralization that will
be encountered if the property is developed and, in the case of mineral
reserves, such statements reflect the conclusion based on certain
assumptions that the mineral deposit can be economically exploited.
Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors which could cause actual events or results
to differ from those expressed or implied by the forward-looking
statements, including, without limitation: risks related to precious and
base metal price fluctuations; risks related to fluctuations in the
currency markets (particularly the Mexican peso, Canadian dollar and United
States dollar); risks related to the inherently dangerous activity of
mining, including conditions or events beyond our control, and operating or
technical difficulties in mineral exploration, development and mining
activities; uncertainty in the Company's ability to raise financing and
fund the exploration and development of its mineral properties; uncertainty
as to actual capital costs, operating costs, production and economic
returns, and uncertainty that development activities will result in
profitable mining operations; risks related to reserves and mineral
resource figures being estimates based on interpretations and assumptions
which may result in less mineral production under actual conditions than is
currently estimated and to diminishing quantities or grades of mineral
reserves as properties are mined; risks related to governmental regulations
and obtaining necessary licenses and permits; risks related to the business
being subject to environmental laws and regulations which may increase
costs of doing business and restrict our operations; risks related to
mineral properties being subject to prior unregistered agreements,
transfers, or claims and other defects in title; risks relating to
inadequate insurance or inability to obtain insurance; risks related to
potential litigation; risks related to the global economy; risks related to
the Company's status as a foreign private issuer in the United States;
risks related to all of the Company's properties being located in Mexico
and El Salvador, including political, economic, social and regulatory
instability; and risks related to officers and directors becoming
associated with other natural resource companies which may give rise to
conflicts of interests. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described in the forward-looking statements.
The Company's forward-looking statements are based on beliefs, expectations
and opinions of management on the date the statements are made. For the
reasons set forth above, investors should not place undue reliance on
forward-looking statements.
The
information provided in this news release is not intended to be a
comprehensive review of all matters and developments concerning the
Company. It should be read in conjunction with all other disclosure
documents of the Company. The information contained herein is not a
substitute for detailed investigation or analysis. No securities commission
or regulatory authority has reviewed the accuracy or adequacy of the
information presented.
�J. Scott
Drever�
J. Scott Drever,
President
For further information, please contact:
Fred Cooper
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
|